Coming on the heels of China's ban of Bitcoin and Ethereum cryptocurrency mining in the country, the heads of Swedish financial and environmental protection authorities this month published an open letter to the Swedish and the EU governments calling to ban energy-intensive cryptocurrency mining.
"The social benefit of crypto-assets is questionable," wrote Erik Thedéen, Director General at the Swedish Financial Supervisory Authority, and Björn Risinger, Director General at the Swedish Environmental Protection Agency, in the open letter (via The Register). "The consumer risks are significant, and crypto-assets are commonly used for criminal purposes. Crypto-assets also have a significant negative impact on the climate as mining leads to both large emissions of greenhouse gases and threatens the climate transition that needs to happen urgently."
Sweden is one of the countries that do not heavily rely on energy generation by plants fueled by coal, oil, and other fossil fuels. 80% of Sweden's electricity comes from its three nuclear power plants (40%), hydroelectric power plants, and wind power generator, so at present Sweden is much greener than other well-developed countries.
Sweden's energy consumption per capita was 11,800 kWh in 2020, which is approximately 50% above the EU average. While electricity prices in Sweden are among the lowest in Europe, they are clearly not the lowest right now. But the share of hydropower generation, the lowest-cost source of electricity, is surging (just like the share of wind power generators), which makes the country a target for cryptocurrency mining farms that demand low-cost energy. But that energy could be used for something more important.
"If we were to allow extensive mining of crypto-assets in Sweden, there is a risk that the renewable energy available to us will be insufficient to cover the required climate transition that we need to make," the letter reads.
As such, the authors ask the Swedish government and the EU authorities to ban energy-intensive cryptocurrency mining, such as Bitcoin and Ethereum, altogether. As an alternative, they suggest allowing non-energy-intensive cryptocurrency mining, but the popularity of the greener Chia coin currency has stagnated for months now. They also write that companies with cryptocurrencies generated using proof-of-work methods (what BItcoin and Ethereum use), were unable 'to describe or market themselves or their activities as sustainable.'